ANNUAL STAR ONE CREDIT UNION REPORT “Improve each member’s life by delivering valuable financial services.”

Star One’s Mission Statement Star One Credit Union is one of ’s largest, member-owned financial institutions. We’ve been serving Santa Clara County for over 64 years with more than 113,000 members worldwide. With assets over $10.1 billion, Star One is ranked 17th in total assets among over 5,700 credit unions nationally. Star One is a credit union focused on members. Our mission is to improve each member’s life by delivering valuable financial services. This year that focus became greater and we found that in unprecedented times, staff and members are stronger together. Star One members can find security in that strength.

ANNUAL REPORT 2020 5 TABLE OF CONTENTS

8 Board Report

10 President’s Report

12 Treasurer’s Report

14 Financial Information

15 Financial Highlights

16 Comparative Financial Results

18 Supervisory Committee Report

20 Community Impact

24 Board of Directors, Supervisory Committee & Management

26 Star One Information

6 STAR ONE CREDIT UNION ANNUAL REPORT 2020 7 that member satisfaction is at 98%. And The needs of the community organizations we we continue to monitor and enhance our support only increased during this extraordinary performance through other metrics, such as year. In this Annual Report, we highlight Second our Quality Member Surveys and Mystery Harvest of Silicon Valley, a wonderful local Shopper Program. organization. Our giving did not end there. We are honored and proud to support 52 organizations The current world situation required us to be in Santa Clara County, to whom we contributed a responsive and flexible to meet members total of $750,000 in 2020. REPORT where they were. Our popular in-person financial education workshops, some of which Under the unique conditions of 2020, the were previously reserved to full capacity, Star One staff stepped up and made a stellar We count ourselves fortunate The mission of Star One is focused squarely were promoted online and through email, and performance for the Credit Union. We pulled to have the opportunity to look on members, and this year, we never wavered conducted via live online webinars. This allowed together as a team, accomplishing remarkable from the goal of improving each member’s life by members to attend conveniently from wherever things and continuing to ambitiously expand back on such a challenging year delivering valuable financial services. As ever, our they were. our offerings in this unimaginable time, while our when our communities have strategy has been to use a sensible approach members patiently showed support through many In February, we expanded our field of been through so much. We in managing the Credit Union, and not react changes. On behalf of the Board, we look forward membership and welcomed people living, watched with the world as the rashly to external factors. The Board of Directors to an even brighter year being stronger together. regularly working, and attending school in come from various backgrounds, and they effects of the pandemic unfolded, several Santa Clara-neighboring counties to apply their decades of experience to be unpaid fires ravaged our state, and social join us. New members from Alameda, Merced, volunteers helping Star One to remain one of unrest rattled our nation. Yet Monterey, San Benito, San Joaquin, San the most successful credit unions in the nation. Mateo, Santa Cruz, and Stanislaus counties through this eventful year, there As challenging as 2020 was, we are confident in California can now sign up for membership is still much to be grateful for members can feel secure about their deposits and open money market savings accounts. We and to celebrate. For Star One, at Star One. Through the decades, we have hope that those who’ve never belonged to a the commitment and resilience weathered many economic storms and are well- credit union before will fully take advantage of positioned to do so again. of our staff and managers, the benefits of the credit union model. These and likewise, the loyalty and It was important in 2020 to not only continue include profits going back to the members in commitment of our members delivering the financial needs of our members, the form of low rates on loans, higher-than- allowed us to continue serving but to do so with the excellent service members average interest on deposits, and convenient expect. We happily report that members remain members successfully during a remote and digital banking services to enhance satisfied, according to surveys conducted their lives. Doug Flowe Chair year like no other. throughout the year. Raddon Financial reported

8 STAR ONE CREDIT UNION ANNUAL REPORT 2020 9 Existing mortgage members had an additional services we offer members is important, although advantage: instead of refinancing, they could use keeping the security of our members’ personal Star One’s Mortgage Rate Modification program financial information safe is paramount. to reduce their rate without going through the Star One has always relied on our members to whole refinance process. For a limited time, we be the best advocates of the value we have to further reduced the already competitive rate and offer. So we were happy to announce we can the low one-time fee, making this already popular now welcome more of our members’ friends, program even more valuable. REPORT coworkers, and family from the counties that We granted more loans in 2020 than any previous neighbor Santa Clara County. As we grow, one of year. Real estate loans totaling $1.366 billion, and our chief goals is to bring even more value to the In 2020, we faced some of the In response to COVID’s devastating effect on $117 million of automobile and other consumer members we serve. And this year, we are proud biggest challenges in the Credit the financial security of many families, Star One loans were granted. Charge-offs remained low to report that CUNA, the largest credit union Union’s history. Despite these provided deferred payment plans on our consumer at .004%. Savings, checking and other deposit trade organization, estimates we provided, on and real estate loans. Plus, anyone affected by difficulties, Star One employees accounts grew to $8.63 billion. Members opened average, $1,270 in direct financial benefits to each the California wildfires could apply for a disaster adapted, overcame and persevered. 7,014 new memberships. member household for the 12 months ending in loan. We all had to adapt to a new way of banking, September 2020. We look forward to providing Star One continued to focus We began offering innovative ways to transfer with a new set of rules, intended to keep everyone even higher levels of service and value to all Star money and make payments. Members can now on our mission of improving safe and healthy. To help members, Star One also One members, in 2021 and beyond. each member’s life by delivering made other accommodations, including the waiver initiate one-time same-day transfers to domestic financial institutions, giving them a great option valuable financial services. of loan payment late fees, out-of-network ATM charges and other account maintenance fees. to transfer up to $25,000 at no additional cost. As an essential business, our objective was to Zelle® was introduced as a new way for members keep members and staff safe while providing the As the economy weakened, mortgage rates to send, receive, and request money quickly, same level of service our members expect. We dropped to unprecedented levels. Members and safely, and securely through Star One’s Mobile kept our branches and back office open, following non-members sought mortgage loans with Star Banking App. And in the fall, contactless cards the guidelines set by local, state and federal One in record numbers. To help first-time home were rolled out, offering members yet another governments. Many of our staff worked from buyers, Star One offered special low down- convenient option to pay with a Star One Visa home, teaming up with in-office employees to payment options, reduced Private Mortgage debit or credit card. Contactless cards allow expertly serve members. Our front-line staff also Insurance (PMI) premiums, flexible loan terms, members to quickly and easily pay with a simple performed well, showing both the dedication and and appraisal-fee refunds of up to $500. We also tap wherever contactless cards are accepted, all agility to meet members’ needs. The patience offered a maximum real estate loan amount of $5 with the same secure technology of chip cards to and cooperation demonstrated by members million, which was especially helpful for the Bay protect members. Expanding the products and Gary Rodrigues President & CEO provided additional help during a difficult time. Area market.

10 STAR ONE CREDIT UNION ANNUAL REPORT 2020 11 year. Our loan portfolio continues to perform Star One continues to thrive and provide valuable much better than other credit unions and banks financial services to our members throughout both locally and nationally with a net charge-off California and the nation. Our loyal membership to average loans ratio of .01%. Our investment and their extensive use of products, services portfolio provides strong returns while maintaining and automated delivery channels provide the safety and security. Star One does not invest in resources for Star One to be one of the most REPORT subprime debt. successful credit unions in the nation.

Membership increased 2.82% to Star One achieved another strong 10% joined through member companies. Over year financially. The Return on the past few years we have seen very strong 113,393. 7,014 new members joined Assets for 2020 was 0.71%. Our growth in new members coming from Santa Star One during 2020. More than Net Worth ratio remains strong Clara County. 59% joined from our community at 11.26%. Our federal regulator Deposits grew $1.16 billion, up 15.52% from $7.47 charter, another 31% joined through considers a credit union with a billion in 2019 to $8.63 billion in 2020. Checking family members, while 10% joined ratio of 7.00% or higher to be increased 27.3% to $522 million. Money Market through member companies. Over Savings Accounts grew 15.5% to $7.28 billion. well-capitalized. the past few years we have seen very Certificates of Deposit grew 15.84% to $395 strong growth in new members Star One’s total assets, excluding borrowed million. Star One continues to pay higher deposit coming from Santa Clara County. funds, increased during the year by 15.35% from rates than most other financial institutions and $8.65 billion in 2019 to $9.98 billion in 2020. does so without the “gimmick” products many Borrowed funds decreased $175 million to $245 other institutions offer. million in 2020. Star One does not borrow funds Loans grew 5.59%, to $4.56 billion. Auto loans to leverage earnings, but rather to mitigate the decreased, down -5.98% or $17.1 million. interest rate risk associated with long-term fixed- Consumer loan growth was -7.10%. Consumer rate member mortgages held in our portfolio. loan delinquency remained low at 0.28% in 2020. Membership increased 2.82% to 113,393. 7,014 Many new and existing members took advantage new members joined Star One during 2020. More of Star One’s low real estate loan rates as home than 59% joined from our community charter, prices continue to increase. Total first real estate Scott Dunlap another 31% joined through family members, while loans increased 8.07%, up $279.1 million for the Treasurer

12 STAR ONE CREDIT UNION ANNUAL REPORT 2020 13 FINANCIAL INFORMATION FINANCIAL HIGHLIGHTS

$10,227 $10,000 U $9,074 $8,821 $8,979 ASSETS L (0.5%) $8,750 $8,568 (45.2%) A $7,500 A TOTAL $6,250 (27.3%) $5,000 O ASSETS O A IN MILLIONS $3,750 (1.8%) (7.7%) $2,500 A $1,250 (15.8%) O 2016 2017 2018 2019 2020 (1.0%) (0.7%) $0 $9,000 $8,626

$8,000 $7,468

$7,000 $6,838 SAVINGS $6,563

$6,000 $5,864 SAVINGS Certi cates TOTAL Money Market (4.6%) $5,000 Savings (84.4%) $4,000 SAVINGS IRA IN MILLIONS (4.6%) $3,000

Checking $2,000 (6.4%)

$1,000 $4,563 2016 2017 2018 2019 2020 $0 $4,321

$3,956 R E $4,000 $3,857 R E (6.0%) $3,662 LOANS (81.9%) $3,500 $3,000 (0.9%) TOTAL $2,500 A (5.9%) LOANS $2,000 IN MILLIONS O $1,500 L $1,000 (1.3%) P L P $500 (0.1%) (3.9%) 2016 2017 2018 2019 2020 $0

14 STAR ONE CREDIT UNION ANNUAL REPORT 2020 15 COMPARATIVE FINANCIAL RESULTS COMPARATIVE FINANCIAL RESULTS (CONTINUED)

Year End Summary 2020 2019 % Change Statement of Operations IN THOUSANDS IN THOUSANDS $10,227,496 $9,073,632 12.7% Total Assets Income 2020 2019 Member Savings and Certificate Accounts $8,626,413 $7,4 67,76 6 15.5% Interest on Loans $140,432 $155,061 Loans to Members $4,562,598 $4,321,231 5.6% Investment Income $81,152 $90,864 Delinquent Loans $2,767 $2,980 -7.1% Other Operating Income $12,696 $10,911 Member Equity $1,222,575 $1,10 5,161 10.6% Cash and Investments $5,300,454 $4,504,544 17.7% Total Income $234,280 $256,836 Dividends Paid to Members $80,819 $130,588 -38.1% Operating Expenses 2020 2019 Employee Compensation $37,260 $33,393 Statement of Financial Condition Retirement Plan Valuation ($289) $4,521 IN THOUSANDS Office Occupancy $2,993 $2,974 Assets 2020 2019 Office Operations $7,151 $7,5 8 0 Cash and Investments $5,300,454 $4,504,544 Loan Servicing $8,098 $6,810 Loans to Members $4,562,598 $4,321,231 Professional & Outside Services $5,817 $5,032 Less: Allowance for Loan Losses ($8,659) ($5,322) Provision for Loan Losses $3,760 $1,746 Land, Building & Equipment $12,841 $13,411 Operating Fee $629 $581 Accrued Interest Receivable $22,252 $24,693 Other Operating Expenses $5,843 $5,517 Deposit-Share Insurance Fund $64,588 $ 57,476 Total Operating Expenses $71,262 $68,154 All Other Assets $273,422 $157,5 9 9

Total Assets $10,227,496 $9,073,632 Income from Operations $163,018 $188,682 Non-Operating Income (Expense) ($865) ($371)

Liabilities & Member Equity 2020 2019 Net Income Before Distribution $162,153 $188,311 Member Savings & Certificate Accounts $8,626,413 $7,4 67,76 6 $7,254 $6,601 Accounts Payable Dividends $80,819 $130,588 $244,800 $419,400 Borrowed Funds Interest on Borrowed Money $12,143 $12,493 Regular Reserves $56,851 $56,851 Added to Reserves & Undivided Earnings $69,191 $45,230 Undivided Earnings $1,094,869 $1,025,678 Unrealized Gain (Loss) on Investments $89,087 $23,956 OCI Derivative Market Gain/(Loss) $13,169 $21,167 Accumulated Other Comprehensive Income ($31,401) ($22,491) Accrued Liabilities $126,454 $74,704

Total Liabilities & Member Equity $10,227,496 $9,073,632

16 STAR ONE CREDIT UNION ANNUAL REPORT 2020 17 During 2020, the Supervisory Committee directed a comprehensive ‘risk-based’ REPORT audit program. Specific audit techniques and methods were applied to operating processes selected for their risks across The Supervisory Committee’s data. They also promote operating efficiencies, all of the Credit Union’s products and primary responsibility is to provide safeguards against fraud, and ensure services. The Supervisory Committee compliance with prescribed managerial policies, assure that Star One has effective contracted with specialized external established procedures, and applicable regulatory internal operating controls and requirements. During 2020, the Supervisory firms to perform independent reviews. that the Board of Directors’ Committee directed a comprehensive ‘risk-based’ plans, policies and procedures audit program. Specific audit techniques and are being properly administered methods were applied to operating processes by management. The 2020 selected for their risks across all of the Credit Union’s products and services. The Supervisory internal audit programs Committee contracted with specialized external consisted of an extensive firms to perform independent reviews. evaluation of internal procedures Based on the reports from ongoing internal audits and policies as well as the and the audits performed during the year by third- hiring of outside audit firms to party firms, the Supervisory Committee reports provide third-party evaluations that Star One is operating in a sound manner. of selected Star One business Moreover, the Credit Union’s internal controls practices. are effectively maintained to reasonably ensure that the Board of Directors’ plans, policies, and Internal controls are in place to ensure the Credit procedures are being properly administered, and Union’s assets are protected and to verify the that the financial results are fairly and accurately Christina Goeas accuracy and reliability of Star One’s accounting represented in communications to the members. Chair

18 STAR ONE CREDIT UNION ANNUAL REPORT 2020 19 Wheels ▪ HomeFirst ▪ Jacob’s Heart Children’s Cancer Support Services ▪ Leukemia and Lymphoma Society ▪ LifeMoves ▪ Lucile Packard Foundation for Children’s Health ▪ Marine Toys for Tots ▪ Martha’s Kitchen ▪ Morgan Autism Center ▪ NAMI Santa Clara County ▪ NephCure Kidney International ▪ Operation: Care and Comfort ▪ Pancreatic Cancer Action IMPACT Network ▪ President & Board of Trustees of Santa Clara College ▪ Rebuilding Together Silicon Valley ▪ Sacred Heart Community Services ▪ San Andreas Regional Center ▪ Santa Clara Women’s League ▪ Saratoga Area Senior Coordinating Council ▪ Second Harvest of Silicon The entire Star One family, from employees to management and Board, Valley ▪ - Prostate Cancer Center ▪ Sunday Friends recognizes the importance of contributing to the community we serve ▪ Sunnyvale Community Services ▪ The Tech Interactive ▪ The Tower and being a strong corporate citizen. Through direct financial donations Foundation of San Jose State University ▪ Veterans Memorial & Support and other in-kind contributions and by participating in local public Foundation of Los Gatos ▪ West Valley Community Services service activities, Star One is an active partner with these organizations throughout Santa Clara County:

Acknowledge Alliance ▪ Alzheimer’s Association ▪ American Cancer Society ▪ American Diabetes Association ▪ American Heart Association ▪ Animal Assisted Happiness ▪ Assistance League of San Jose ▪ Auxiliary of the Good Samaritan Hospital of ▪ Avenidas ▪ Bill Wilson Center ▪ Cake4Kids ▪ California Veteran’s Connection ▪ Cancer CAREpoint ▪ Canine Companions for Independence ▪ Child Advocates of Silicon Valley ▪ Citizen Schools ▪ Community Health Awareness Council ▪ Community Services Agency ▪ Crohn’s and Colitis Foundation of America ▪ Cystic Fibrosis Research, Inc. ▪ Downtown Streets Inc. ▪ Family Giving Tree ▪ Family Supportive Housing, Inc. ▪ Friends of Stevens Creek Trail ▪ Happy Hollow Foundation ▪ Health Trust: Meals on

20 STAR ONE CREDIT UNION ANNUAL REPORT 2020 21 We feel happy and fortunate that we can get delicious and healthy food to cook with, even when we don’t have money to buy it. Having meals like these makes my mom HIGHLIGHT feel more hopeful and less worried about putting food on the table or Since 1997, Star One has partnered with Second Harvest of Silicon Valley to help my unemployment. provide over 750,000 meals to our community. This year, as COVID-19 impacted families around the county, Second Harvest called on all partners, emphasizing that “Unprecedented times require the unparalleled support of our community.” Since the Tuyet pandemic, the number of clients they served each month doubled to over 500,000 Client people in May of 2020.

For the fiscal year 2019/2020, Star One gave Second Harvest $130,000 in Corporate Donations. Employees donated an additional $1,075. These contributions provided 262,150 meals to families in need. The strength of the families and individuals in our community inspires us to continue serving. Through the decades, and especially this trying year, Star One stands with the community and is committed to helping families and individuals to thrive.

22 STAR ONE CREDIT UNION ANNUAL REPORT 2020 23 Board of Directors Star One Management Doug Flowe Scott Dunlap Martin Eng Gae Adams Gary Rodrigues Vanessa Brosas Russ McAlpine Kathy Sullivan Chair Treasurer Director Emeritus Director President & CEO Vice President Vice President Vice President Branch Services Information Systems Deposit Services David Daggett Richard Aochi Melissa Henck Bill Lewis First Vice Chair Secretary Director Emeritus Director Margarete Mucker Joe Fagenstrom Safal Panicker Victoria Tabler Executive Vice President Vice President Vice President Vice President Jeff Gaut Patricia Humecke Triny Lee Operations Marketing Treasurer Real Estate Lending Second Vice Chair & Assistant Secretary Director Assistant Treasurer Brian Ross Minal Gupta Regina Rutledge Executive Vice President Vice President Vice President Finance & Administration Remote Services Human Resources Supervisory Committee Kevin Collins Alex Kim Ann Sebastian Senior Vice President Vice President Vice President Christina Goeas Ponprom (Mel) Flynn Krishna Marella Cyrus Tabari Loan Services Audit and Compliance Controller Chair Member Member Member Brian Lawler Secretary Board/Supervisory Committee Associates Jim Barnhart Tyler Brock Milan Gandhi Madelaine Kolda Kristen Mank

24 STAR ONE CREDIT UNION ANNUAL REPORT 2020 25 Star One Information

De Anza Branch | Cupertino Star One Administration Office | Sunnyvale 10991 N. De Anza Boulevard, Cupertino, CA 95014 1306 Bordeaux Drive, Sunnyvale, CA 94089 Phone: (408) 543-5202 El Camino Branch | Palo Alto Toll-Free: (866) 543-5202 3903 El Camino Real, Palo Alto, CA 94306 Fax: (408) 543-5203 Blossom Hill Branch | San Jose 1090 Blossom Hill Road, San Jose, CA 95123 Mailing Address PO Box 3643, Sunnyvale, CA 94088 Stevens Creek Branch | San Jose 3136 Stevens Creek Boulevard, San Jose, CA 95117 Big Basin Branch | Saratoga 14411 Big Basin Way, Saratoga, CA 95070 Federally insured by NCUA Enterprise Branch | Sunnyvale 1080 Enterprise Way, Suite 150, Sunnyvale, CA 94089

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